Forced franchise consolidation will distress thousands of drivers and strand millions of commuters

by IBON Foundation

Bongbong Marcos Jr’s refusal to extend the deadline for franchise consolidation reveals how callous his administration is to ordinary Filipinos – the livelihoods of tens of thousands of public utility vehicle (PUV) drivers and operators will be disrupted and millions of people will have an even harder time commuting. The abrupt banning of so many jeepneys portends forced modernization and drastic fare hikes. Millions of Filipinos will be affected and not just a “minority,” contrary to Marcos Jr’s claims.

Under the mandatory franchise consolidation, instead of individual franchises, only one cooperative or corporation will be issued a franchise to ply a single route. Traditional jeepney and utility van express (UVE) vehicles not consolidated into a cooperative or corporation will no longer be allowed to operate. This means hundreds of thousands of drivers and operators nationwide and their families will lose their livelihoods.

The Department of Transportation (DOTr) estimates that 71,395 public utility jeepneys (PUJ) and UVE units nationwide have not been consolidated, consisting of 64,639 PUJs (43% of total PUJs) and 6,756 UVE units (35% of UVE units). This could mean around 140,000 drivers and operators who cannot afford to consolidate or, with their families, over half a million Filipinos economically displaced in the new year. This does not even include thousands of drivers and operators already consolidated in cooperatives who are in debt and struggling to make a living.

With only 57% of PUJs and 65% of UVEs nationwide consolidated, millions of commuters will have to deal with longer lines, longer waiting times, and more crowded rides from the start of the new year. Commuting time is also not guaranteed to be shorter, as the government has been inefficient in planning the new routes. The mass transport crisis will worsen due to the limited number of consolidated PUVs and the lack of a clear government program to deal with the huge gap after the forced consolidation deadline.

The consolidation rate in the National Capital Region, which has the biggest and most concentrated population in the country, is even lower than the national average at only 26% of PUJs (10,973) and 34% of UVEs (2,497) consolidated. There are an estimated nine million jeepney passengers daily in Metro Manila alone and the lack of consolidated PUJs will leave many of them stranded.

The Marcos Jr administration is indifferent to the plight of PUV drivers, operators and commuters and instead is more concerned with private sector interests that will benefit the most from the forced consolidation. The worsening privatization and corporatization threatens to raise jeepney fares by 300-400% over the next few years.

As it is, Manny Pangilinan-backed modern PUJ operator Byahe will be investing more than Php1.5 billion on more than 500 e-vehicles to ply 35 routes mostly in Metro Manila and Cebu by 2027. The Aranetas through their Beep Jeeps and the Villars through their MetroExpress Connect also have investments in modern jeepneys.

As the consolidation deadline fast approaches, it is important to support the impending transport strike, to not only stand with the PUV drivers and operators and their families in the fight for their livelihoods but to also demand a genuinely sustainable and pro-people public mass transport system.

Yearstarter: Seeking better normal in 2022

by IBON Foundation

What’s in store for the economy in 2022? Omicron is on everyone’s mind now and coughs, colds, sore throats and fevers are everywhere among the vaccinated and unvaccinated. That feeling of tiredness may not necessarily be due to COVID-19 though.

It could be the Duterte administration’s underwhelming response for two years now that’s getting tiresome. The government can do so much more than its emerging twin-pronged strategy of downplaying the pandemic – including hiding its true impact from the public – and putting the burden of adjusting to it on the people.


The biggest thing the economy had going for it coming into 2022 was reopening after the protracted and periodic lockdowns since the coronavirus first hit the country. Key indicators such as Google mobility data clearly show increased activity especially since September 2021 and through the holiday season, also corresponding to lower COVID-19 response stringency index measures since the middle of the year.

Despite this reopening, it is however conspicuous that the economic rebound has still been very shallow. It looks like gross domestic product (GDP) growth in 2021 will still just make up for barely half of the -9.6% growth (contraction) due to the lockdowns in 2020. (See Chart 1)

This is most of all due to the economic managers putting more emphasis on so-called fiscal consolidation than the fiscal stimulus so needed by the lockdown-ravaged economy. National government budget increases in 2020 (11.3% increase) and 2021 (9.9%) were actually even below the 14.3% average increase in the period 2016-2019. The 11.5% increase in the recently approved 2022 budget is also still below par.

So while there’s some momentum from reopening, the economy is still weighed down in 2022 by the effect of government conservatism and stinginess. It still isn’t doing enough to fix the damage its lockdowns caused on aggregate demand and supply.


Household consumption accounts for some 70% of the economy. The loss of incomes and livelihoods is however huge and the Bangko Sentral ng Pilipinas (BSP) reports that around seven out of ten (69.8%) households didn’t have any savings as of the fourth quarter of last year. This is consistent with a Social Weather Stations (SWS) self-rated poverty survey in September that had 79% of families reporting themselves as poor (45%) or borderline poor (34%).

Implicitly low incomes are eroded further by how inflation has been mostly accelerating since the end of 2019 or even before the pandemic. (See Chart 2) These are huge dampeners on aggregate demand aside from indicating considerable distress to poor families and household welfare.

On the supply side, the Philippine Statistics Authority (PSA) reported 138,843 establishments employing 565,446 people permanently closing in 2020 and 2021. (See Table 1) This however does not count likely tens of thousands more informal unregistered establishments that closed but were not captured by official statistics.

December labor force figures still aren’t out but these will likely only confirm that 2022 is starting with high unemployment and greatly worsened quality of work. These repress consumption spending and, by extension, enterprise growth. They are difficult conditions for smaller establishments to reopen, expand or even just stay in business. Telecommunications, energy, water, banking and finance, and real estate and construction where tycoons concentrate are the only ones recovering quickly and looking to thrive.

Unemployment is officially reported at 3.2 million as of November 2021. But it may be as much as 8.3 million if unpaid family workers (3.7 million) and uncounted jobless merely because of a stricter definition of unemployment since 2005 (some 1.5 million) are also counted. Unemployment and unpaid work have remained stubbornly high despite the economy reopening. (See Chart 3)

Reported increases in employment unfortunately do not really reflect stable or decent-paying work. The 2.9 million net employment created by November 2021 compared to pre-pandemic January 2020 is wholly informal in irregular self-employment (1.5 million) and unpaid family work (1 million).  It should moreover be noted that there are 389,000 less full-time workers and 457,000 less wage and salary workers in private establishments.

Slowing world

The government target of 7-9% growth in 2022 is questionable – the economic managers have never met their declared original growth targets since 2017, and just revise targets as actual adverse performance becomes evident. (See Chart 4) The so-called growth momentum is mainly imagined.

The effects of reopening are overemphasized and the impact of economic scarring underestimated. It also remains hazy if the pandemic really is on the way out in the country or abroad. The impact of new variants like Omicron and others that are different in terms of transmissibility, severity and resistance to vaccines remains to be seen.

And it’s not as if all is well in the world economy. It may seem a long time ago but when the pandemic hit in 2020, global capitalism was into 11 years of striving, and failing, to overcome protracted stagnation since the 2008 global financial and economic crisis. As in the Philippines, rebounding back to this only seems desirable because of how bad things were when the world locked down.

Today, there is still that protracted stagnation to deal with but also a number of additional stressors. Foremost is vastly higher global debt which hit a record US$296 trillion, equivalent to 353% of global GDP, by the middle of 2021. Monetary policy will likely tighten soon to rein in high inflation. Rising interest rates will cause tremors in the debt pile including in the Philippines.

But global unemployment is also higher and supply chains are possibly in flux. Global growth will almost certainly decelerate in 2022 and beyond especially as fiscal stimulus in other countries fade – real stimulus, unlike the press release version in the Philippines. The United States (US) and China are the acknowledged biggest drivers of the global economy; they are each already hitting their respective rough spots aside from still bickering with each other.

Slowing PH

Domestically, the base effect driving the country’s GDP growth last year will start tapering off in the first quarter of 2022. With the rebound from reopening over and weighed down by lockdown-induced economic scarring, the economy is unlikely to return anytime soon to even just its pre-pandemic growth rates.

The pre-pandemic trajectory is perhaps also not even something to want to return to. Economic growth was slowing for three consecutive years even before the pandemic from 7.1% in 2016 to 6.9% (2017), 6.3% (2018), and 6.1% (2019). (See Chart 1) Despite much administration hype, the economy was not really developing any long-term growth drivers.

Lacking fresh ideas, the government is also putting too much faith in its stale Build, Build, Build infrastructure program to revive the economy. As the Duterte administration’s economic managers do not tire of telling, the public infrastructure budget has been continuously rising under its watch. It almost doubled (78% increase) from Php590 billion in 2016 to Php1.1 trillion in 2019, with the equivalent share in GDP increasing from 3.9% to 5.4% over that time.

Yet over 2017-2019, economic growth still kept slowing and annual average job creation of 313,338 was the slowest in 35 years or among all post-Marcos administrations. The gains were disproportionately low even in construction subsector employment. Between 2016 and 2019, this only saw a 23% increase to 4.2 million mainly low-paying and short-term jobs.

Election spending this year may also not give the accustomed boost many may be hoping for. The more unresolved the pandemic and the less physical campaign-related activities, then the weaker the additional impulse.

As it is, the best-case scenario with the government’s business-as-usual approach is that the country ends 2022 at around its pre-pandemic 2019 level of economic output. This means that three years of economic growth will still have been lost, not to mention the immeasurable suffering and hunger over that time of tens of millions of poor and low-income families.

There will be growth in 2022 – this is inevitable with the reopened economy – but it will not be broad-based. Nor will it fix worsening job scarcity.


Which is not to say that all this has to be a foregone conclusion. If it chose to, the administration that is exiting and the new one entering can take a more rational and humane approach to recovering and reforming the economy.

This starts with breaking the inertia of tepid public health measures to contain the pandemic. Mass testing, diligent contact tracing, and smart quarantines that do not burden the working class remain the ideal measures to avert explosive case numbers and the uncertainty and distress in their wake. The Omicron variant has shown how over-relying on vaccinations is insufficient when new variants can still arise because global vaccination is still so uneven and lacking especially in the global South.

Giving meaningful cash assistance to the poorest 18 million families will not just improve their welfare but also spur consumption spending and aggregate demand. The hundreds of billions put in their pockets to spend will also be a much more effective fiscal stimulus than the same amount going to capital-intensive or import-dependent or corruption-wracked infrastructure projects.

This does not have to be inflationary. Likewise giving meaningful support to domestic agriculture and local enterprises can ensure a supply response. This support can also be given with a long view to expanding rural productivity and spurring Filipino industrialization. These are still the essential foundations of the national economy, job creation, and dynamic modernization.

The fiscal constraint need not be binding. Large government deficits and, to some degree, even rising debt can be justified if these result in increased economic activity. The problem is not large deficits and debt per se – rather, it’s why we cannot more quickly grow out of these deficits and debt in a way that lifts the conditions of the majority instead of just a few.


The economic managers also favor credit ratings, competitiveness, openness to foreign investments, international reserves, and other such indicators. This however confuses what are merely possible means to development as ends in themselves. In the worst instances – such as with regressive tax “reforms” – outright anti-development measures are portrayed as steps forward.

The result is paying scant attention to real economic foundations, decent work, and eradicating poverty for the majority – while over-emphasizing profitability for conglomerates and the wealthy families owning them.

The pandemic has been a radical shock to the country. Entering the new year and, soon, a new administration, it is also timely to ask for more radical measures breaking from the economic conservatism which has weighed down the economy and development for the people for so long. #

Yearender: Unrepentant economics in 2021

IBON Foundation

The Duterte administration is weirdly fond of congratulating itself for having “game-changing” economic reforms. It first used the term to refer to tax packages crafted in 2016, then subsequently kept using it to describe all of its pet measures – infrastructure spending, rice liberalization, health financing, tax reform, national ID system, ease of doing business, and so on. It still smugly back-pats itself as 2021 draws to a close.

The choice of a sports metaphor favored by the business community is actually revealing. For the economic managers, managing the economy is really about making big business prosper most of all. It’s unfortunately not about doing everything to improve people’s lives or alleviate their distress. It’s not even really about the businesses of the little folks – micro, small and medium enterprises (MSMEs).

Throughout 2021 and to its very end, such as in slow and stingy typhoon Odette response, the Duterte administration is leaving ordinary people behind.


There was so much to do after 2020. The unnecessarily long and harsh lockdowns caused the worst economic collapse and joblessness since national accounts and labor force trends started to be recorded after the end of the Second World War.

Public health measures to contain the pandemic still should’ve been foremost – free mass testing, methodical contact tracing, and judicious quarantines. But the government grossly underinvested in all of these while reopening the economy.

Especially because vaccination was among the slowest in the region, this resulted in daily COVID-19 cases and deaths generally increasing through most of the year until September. At its worst, there were eight times as many cases and four times as many deaths in 2021 compared to the peaks in 2020.

The Duterte administration also refused to stimulate the economy beyond empty statements and inflated “game-changing” rhetoric. The end result is an economy that merely rebounded and is still a long way from recovery. As ever, it’s the poor who are worst off.

More rapid economic growth gave the illusion of recovery. This was however just inflated in coming from the record collapse and low base in 2020. The reported 4.9% gross domestic product (GDP) growth in the first three quarters of 2021 is from a huge -10.1% growth (contraction) in the same period last year. It still doesn’t make up even half of what the lockdowns cost the economy.

As it is, quarterly economic output is still just as low as it was three years ago in 2018. Most sectors have lost two to as much as 11 years of output. Transport, hotels and restaurants are among the most badly hit and only a few tycoon-dominated sectors like utilities and finance kept growing. GDP per capita is meanwhile down to 2017 levels.

Rough going

The crisis doesn’t affect everyone the same. On one hand, poverty by official standards grew 3.9 million to 26.1 million Filipinos in the first semester of 2021. This estimate of one out of four Filipinos poor (23.7%) is according to a low poverty threshold of just some Php79 per person per day though – as if Php80 a day is enough to escape poverty.

The number of poor and vulnerable Filipinos is more likely closer to 18 million families or some 78 million Filipinos. Around seven out of 10 households (69.8%) didn’t have any savings as of the fourth quarter of 2021. Self-rated poverty surveys meanwhile have some 79% of families reporting themselves as poor (45%) or borderline poor (34%).

These are huge numbers of families with little capacity to deal with economic shocks or calamities. It’s interesting how they might react to administration propaganda of “a strong and early recovery”.

Such poverty also belies claims that the labor market is improving. According to labor force surveys, employment is up 1.3 million in October 2021 from January 2020 before the pandemic. The devil however is in the details.

The most obvious understated detail is that officially reported unemployment over that same period is also up by 1.1 million to 3.5 million. Even by just this, the Philippines already has the worst unemployment in the region.

But the true rate of unemployment (TRUE) is probably even higher at around 8.2 million or more – consisting of official unemployment (3.5 million), correcting for the 2005 change in definition which cut those counted as jobless (initially estimated at 1.5 million), and unpaid family workers (3.2 million).

Yet the reported 1.3 million increase in employment is also misleading and doesn’t really indicate decent-paying work. This net employment creation since last year is wholly informal in irregular self-employment and unpaid family work. The increase reflects millions of Filipinos just trying to get by however they can, especially those who lost their jobs because of the lockdowns.

In terms of hours worked, the number of full-time workers is down by 1.4 million (to 27.3 million) while part-time workers bloated by 2.6 million (to 16 million).

By class of worker, there are 369,000 less wage and salary workers (down to 27.4 million); this includes 621,000 less work in private establishments only partly off-set by increased public sector jobs.

Laid-off workers and others seeking livelihoods made do with merely informal work which bloated by 1.7 million. The number of self-employed increased by 758,000 (to 11.9 million), employer in own farm or business by 354,000 (to 1.4 million), and unpaid family workers by 541,000 (to 3.2 million).

Amid govt back-patting on merely rebounding economic growth, much more ayuda to poor households and assistance to distressed MSMEs is critical to even just start to recover. This fixes the lockdown-induced collapse in aggregate demand especially among families – made worse by rising inflation since last year – and the corresponding closures and reduced operations of MSMEs.

Extrapolating from a trade and industry department survey, around 96,000 MSMEs closed shop while some 460,000 were only partially operating as of June 2021. This probably still doesn’t include tens of thousands more troubled but unregistered small businesses.


The majority of Filipino grappled with joblessness, falling incomes, depleted savings, and high prices. On the other hand, the country’s wealthiest continued to prosper often with timely government support.

The combined wealth of the 50 richest Filipinos recovered quickly and grew 30% in 2021 to US$79.1 billion (Php4 trillion). Among the biggest gainers were close Duterte allies – Manny Villar’s wealth grew 32% (to Php327 billion), Ricky Razon’s by 33% (Php283 billion), Ramon Ang’s by 13% (Php112 billion), and Dennis Uy’s by 7.5% (Php35 billion).

The Duterte administration supported big business through the pandemic. Publicly-funded road, bridge and rail projects under its Build, Build, Build infrastructure program boosted the property values of tycoons’ real estate projects and increased traffic to their port terminals. The Corporate Recovery and Tax Incentives for Enterprises (CREATE) law cut the corporate income taxes they pay, increasing large enterprises’ profits by some Php70 billion – and reducing government revenues by the same amount – just in 2021.

Pres. Duterte and his economic managers actually acknowledge their inaction and justify this by claiming insufficient government resources. The president is folksy and says there’s no money. The economic managers have a fancier term – fiscal consolidation.


By any name the Duterte administration’s restraint is self-defeating in so many ways. Insufficient spending on public health measures increases the risk of a COVID-19 surge if new variants are more transmissible or vaccine-resistant.

Insufficient spending on ayuda doesn’t just make families suffer disproportionately from the over-reliance on lockdowns. It also represses consumption spending and aggregate demand, especially amid worsening job scarcity.

Insufficient spending to help MSMEs stops them from reopening or expanding – tightening aggregate supply and, through less hiring and lower pay, aggregate demand as well. All of this put together makes recovery uncertain and unnecessarily protracted.

The insistence that there’s no money is actually suspect. The government had a budget of Php4.3 trillion in 2020 and Php4.5 trillion for 2021. This was supported by considerable borrowing – Php2.7 trillion in 2020 and Php2.8 trillion so far in 2021.

Little of the government budget (and debt) actually went to COVID-19 response. The budget department reports just Php570 billion in disbursements for COVID-19 under Bayanihan 1 and 2, the 2020 GAA and the 2021 GAA as of September 30, 2021. This is barely half the US$22.5 billion or around Php1.12 trillion that the finance department claims to have secured in financing for COVID-19 response as of September 5, 2021.

So what has the Duterte administration been spending on amidst the biggest public health and, arguably, humanitarian crisis in decades? So far in 2021, it has spent Php702.4 billion on infrastructure (as of October) and paid Php1.13 trillion in debt service (as of November). In either case, much more than on COVID-19 response.

This just points to the Duterte administration’s real priorities. It is just using COVID-19 response as smokescreen for hugely bloated borrowing to compensate for lost revenues because of its over-reliance on lockdowns, to keep financing its grandiose infrastructure program benefiting a few, and to keep creditors happy.

For argument’s sake, would the government spend more on relief and disaster response if it had the resources? Apparently not. The economic managers are actually expecting to have some Php260 billion more than expected in 2021 – with Php150 billion more revenues and Php110 billion less spending in 2021 than targeted.

Instead of using this to alleviate extended suffering since the lockdowns hit and which was compounded by typhoon Odette in the closing weeks of the year, it is keeping this untouched to prettify its deficit targets for the sake of creditworthiness.


Little improvement can be expected in the last few months of the administration’s term when it will be most of all concerned with navigating conflicting political ambitions in the May 2022 elections. The short-sighted drive for power will, once again, trump the long fight against poverty and underdevelopment.

The coming year is looking to be tumultuous for the economy. A surge is already likely in the opening weeks of the year and will stoke uncertainty. Minus the base effect from the 2020 collapse, the economy will return to its pre-pandemic trajectory of decline – further weighed down by high unemployment, informality, and other economic scarring. If ever, a return to power of the Marcoses in the 50th anniversary year of martial law will signify dysfunctional politics taking a turn for the worse.

The consequences for the country are unclear but will almost certainly be profound. #

Suspending TRAIN oil taxes will lower oil prices and ease inflation—IBON

Supporting calls to suspend oil excise taxes, research group IBON said that this will go far in immediately easing the burden of rising prices on ordinary Filipinos. The group added that revenue losses can be compensated by similarly suspending recent corporate tax cuts.

IBON said that these measures can be the start not just of a more progressive tax system but also a prelude to better regulation and control over the country’s oil industry.

Amid tight supplies and later increasing demand, global oil prices have been generally rising since the pandemic started including for eight straight weeks now.

The Organization of Petroleum Exporting Countries (OPEC) has cut production, the US is not releasing oil from its Strategic Reserve, and China instructed its energy companies to secure supplies for the coming winter.

From August 23 to October 15, the price per barrel of Dubai crude increased by US$15.95, Mean of Platts Singapore (MOPS) gasoline by US$19.05, and MOPS diesel by US$22.65.

Gasoline prices in this Pasig City fuel station has gone past P70/liter after last week’s oil price hike. (Photo by Pom Villanueva/Kodao)

The country is heavily reliant on oil imports so the global oil price hikes are causing domestic oil prices to follow suit. In just the past eight weeks, the price per liter of diesel hiked by Php8.70, gasoline by Php7.25, and kerosene by Php8.10.

This disproportionately burdens poor oil consumers and Filipino households, IBON said.

Just from the eight weeks of hikes, for instance, jeepney drivers have to pay Php95.70 more for 11 liters of diesel per day. Farmers have to pay Php1,653 more for 190 liters of diesel per hectare per cropping season.

Rising oil prices increases the prices of basic goods and services, IBON stressed, and fuels inflation. This is worst for the poorest 30% of the population for whom inflation is higher than the national average.

Inflation across many commodity groups is already much higher now than last year. Food inflation increased from 1.8% in the whole of 2020 to 5.4% in September 2021. Over that same period, inflation in housing, water, electricity, gas and other fuels increased from 2% to 3.4%, and in clothing and footwear from 2.5% to 2.7 percent. Inflation in health, transport and education have fortunately moderated.

IBON said that suspending the oil excise taxes under Tax Reform for Acceleration and Inclusion (TRAIN) will provide immediate relief. This will lower the price per liter of diesel by Php6.72 and of gasoline by Php6.33.

It will also remove Php3 from the price per kilo of liquefied petroleum gas (LPG), lowering the price of an 11-kilo tank by Php33 not including VAT.

The price per liter of diesel can go down from some Php46.33 to Php39.61, gasoline from some Php55.51 to Php49.18, and LPG from some Php968.90 to Php935.90.

IBON also said that oil revenue losses can be offset by also suspending corporate income tax (CIT) cuts under the Corporate Recovery and Tax Incentives for Enterprises Act or CREATE.

The group noted that the government projects revenue losses of Php115.8 billion in 2021 and Php101.8 billion in 2022 from CREATE’s CIT cuts.

Reducing indirect consumption taxes such as on oil and increasing direct taxes on income makes the tax system more progressive, said IBON.

The group stressed that these immediate measures are doable and will help lower domestic oil prices and ease inflationary pressures, substantially mitigating the burden of global oil price hikes on the poorest.

Longer-term solutions should also start to be seriously considered, said IBON.

IBON stressed that more effective regulation and control of the oil industry is the only way to sustainably lower oil prices.

This can start by ensuring transparency in oil firms’ price-setting and active state intervention to prevent overpricing.

IBON pointed out that oil firms have had too much freedom to raise domestic oil prices opaquely and at will since the Oil Deregulation Law or Republic Act 8479, often changing pump prices by more than warranted by global oil price increases.

IBON also said that renationalization of oil firms such as Petron will increase the government’s capacity to intervene in the industry, with the strategic view of eventually nationalizing the majority of the oil industry. #

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Kodao publishes IBON articles as part of a content sharing agreement.

What Build Build Build has delivered

by Rosario Guzman

The Duterte presidency is nearing the end of its term, yet we don’t seem to be anywhere near the fulfilment of the big infrastructure dream of the administration. Build Build Build is supposed to be the centerpiece of what could be a Duterte legacy, but the program’s performance is far from defining a grand exit for the administration.

The number has changed

Only 11 of the more than 100 infrastructure flagship projects or IFPs have been completed as of May 2021. The National Economic and Development Authority (NEDA) lists another 12 IFPs that may be done by the end of 2021 and another 17 by the end of 2022. If these were even feasible, there would be a total of 40 finished projects under Pres. Duterte’s watch.   

The government started with a list of 75 IFPs in 2017. In 2020, NEDA revised the list twice – increasing this to 104 and then to 112 (no longer including the 7 of the 11 finished projects). It retained only 42 of the original 75 and added new ones that are more doable, or that are not even defined as public works such as the national ID system, or projects that are merely continued from previous administrations. The list was obviously revised to increase the chances of completing a respectable number of projects.

Of the 11 projects completed so far, six were not included in the original 2017 IFP list. Two of these six – the LRT 2 East Extension and the Metro Manila Skyway Stage 3, were even started under the previous administration. Of the 12 IFPs expected to be finished by the end of this year, 11 are new additions to the list including two previously identified projects that had also been started long before Pres. Duterte’s term – the Unified Grand Central Station (a previous commitment by the Arroyo administration but was stalled due to disputes) and the Malitubog-Maridagao Irrigation Project (started in 2011). Of the 17 IFPs for completion by end of 2022, only the Chico River Pump Irrigation Project was in the 2017 list, while the rest were only added last year.

Even if we do see the completion of these 29 IFPs by the end of 2021 and 2022, all the finished projects will still just amount to Php365.24 billion which is only 7.8% of the total project cost of Php4.7 trillion for all targeted IFPs. Much remains to be done actually, with 51 projects going beyond 2023 while 28 others are still in the pipeline.

Driven by debt and private capital

Nevertheless, the Duterte administration has already crowed about its unmatched performance in infrastructure, citing as an indication of its seriousness the almost 100% increase in government spending for this, from Php590.5 billion in 2016 to Php1,019 billion in 2021. It has increased infra spending as percent of the gross domestic product (GDP) from 3.9% in 2016 to 5.1% in 2021. The annual average of 5% infra spending as percent of GDP in 2017-2021 even surpasses the annual average of 3.4% under the Marcos dictatorship. This is even despite the 21.4% decline in disbursements last year due to the pandemic.

In the Sulong Pilipinas forum of the administration in April this year, the economic managers took turns highlighting how the administration has boldly financed infrastructure for economic development in contrast to the Aquino administration’s lackluster performance.

However, more than half (56%) of the indicative amount for the IFPs is from official development assistance (ODA), mostly as loans, while only 3.9% comes purely from the General Appropriations Act (GAA) or the national budget. Conspicuously, there are now 20 unsolicited public-private partnerships (PPPs) where there was none before, comprising 32% of total cost.

There are seven other PPPs worth Php244.2 billion or another 5.2% of the total cost. Five of these PPPs, all expressways, are components of the Supplemental Toll Operation Agreement (STOA) entered into by the government’s Toll Regulatory Board (TRB), Ramon Ang’s Citra Central Expressway Corp., and the Philippine National Construction Corporation (PNCC). STOA ensures the identification, adjustments and collection of toll rates upon the completion of the projects.

The government has also mixed PPP with ODA in the case of LRT-1 Cavite Extension Project to be accomplished beyond 2023, and with GAA in the case of Metro Cebu Expressway Project which is still in the pipeline. There is also ODA mixed with GAA in the case of Davao City Coastal Road Project to be done after 2023.

PPP was the preferred funding scheme of the Aquino presidency, which was criticized not only for its slowness but more importantly for benefiting the real estate and infrastructure tycoons. The then incoming Duterte presidency declared that the state would proactively make an investment, raising hopes that infrastructure would finally be cheaper and more relevant to public needs. But in reality, the government simply shifted to ODA loans especially from Japan and China; in particular, the share of China ODA to total ODA to the Philippines increased from a negligible 0.01% in 2016 to 2.73% as of 2019. The Duterte presidency also ended up still relying on private capital, unsolicited proposals at that, to expedite projects. Overall, it appears that the promised change of having a genuinely state-led infrastructure development and presumably for maximum public benefit has not come at all.

Instead, the administration doubled its gross borrowings from Php507 billion in 2016 to Php902 billion the following year, breaching the unprecedented Php1 trillion mark in 2019 and nearly tripling this in 2020. The national government outstanding debt as of May 2021 is Php11.1 trillion – it was only Php6 trillion when Pres. Duterte took over.

Building up foreign investors and oligarchs

Unsolicited proposals for PPPs from the private sector are allowed under the 1990 Build-Operate-Transfer (BOT) Law (Republic Act 6957 as amended by Republic Act 7718), the country’s watershed legislation towards privatized infrastructure development. These projects do not require direct government guarantee, subsidy or equity, and presumably involves a new concept or technology. The BOT Law also defines and allows the Swiss Challenge as the procurement system to be followed for unsolicited proposals, where upon the project proposal of a private entity, the government invites similar or competitive proposals from third parties which the original proponent can still match afterwards.

Pres. Duterte adopted the Swiss Challenge and eliminated the normal bidding process for public works, wherein the government presents the specifications of the procurement and invites entities to make offers, which could be in an open or closed bidding. Controversially, Malacañang argued that this would quicken the pace of Build Build Build and minimize corruption. On the contrary, the Swiss Challenge can potentially concentrate infrastructure control to only a few proponents as well as government officials. It can definitely lower transparency, such that the novelty of the concept or technology does not get to be subjected to public scrutiny. In other words, the government has skipped the development planning process and relied on what the private sector wants to embark on, thereby making infrastructure inherently exclusive rather than inclusive.

All of the unsolicited PPPs are for transport and mobility. In fact, 76 of the 112 IFPs, or 91% of the total project cost, are for transport and mobility. Likewise with 71% of the total project cost of the 40 projects that the administration hopes to announce as done by 2022. Build Build Build prioritizes transport and mobility as though the country’s transport and traffic problems take precedence over the crisis and stagnation of agriculture and manufacturing.

In reality, the ‘infrastructure ambition’ is about three things for the Duterte administration. It is about providing the infrastructure foreign investors want – to improve connectivity to the economic zones and ease the cost of doing business. The country’s creditors, notably the World Bank and the Asian Development Bank (ADB), have been nagging the Philippine government to make pleasant infrastructure to increase the country’s creditworthiness and investment grade and to attract much-needed foreign investment in the import-export economy. That is visibly the first and basic reason for making Build Build Build look grand and why past administrations had merely focused on providing infrastructure as their primary task in a liberalized and privatized economy.

Secondly, Build Build Build is about providing foreign and local investors and builders the business they want. The Duterte administration wanted to take advantage of the global infrastructure investment glut that was largely untapped in 2016 by flashing a grand infrastructure menu card. In short, it has promoted infrastructure as the foreign investment destination, along with energy, water and public utilities which also have vast infra needs. This has immensely enriched foreign infra, utilities, construction and transport technology corporations despite the rise in global interest rates and prolonged global economic slide. And now, despite the pandemic and declining global investments, the Duterte administration continues to sell the dream.

Thirdly, Build Build Build is about boosting the wealth of the country’s economic oligarchs, especially those in real estate construction, ports building, transportation, energy and water, and the consequent speculation on values of land and natural assets. International and national media have observed how Pres. Duterte has empowered a new business elite, the “Dutertegarchs”, and created his own set of cronies who have benefited from full-scale liberalization of foreign investments and private capital in otherwise public goods and domain.

Legacy of deeper crisis

Much of the hyped benefits from embarking on a massive infrastructure program have failed to materialize. Build Build Build has been the Duterte administration’s only hope to arrest the economic slowdown pre-pandemic, and now to recover the economic collapse during the pandemic and beyond.

But it has been the wrong choice of policy from the start. The economy needs mending in its production sectors, especially those catering to domestic needs and that have the capability to create meaningful jobs for the mass of jobless and sustainable incomes for the poor majority. But the government has chosen to spend on boosting investor confidence and opportunities. Even spending on health pales in comparison with the Php1.1 trillion allocation for infrastructure in the 2021 budget.

Consequently, this wrong policy mindset only boosts the production of infra materials by the corporations of the contracting countries. In the case of ODA for instance, loans are always preconditioned by the host country’s use of the so-called donor country’s contractors, technology as well as businessmen. At one point, China even pushed for the use of its own workers in Philippine projects. Consequently, this has increased the country’s imports bill, resulting in the country’s worst trade deficit. But the more important consequence is that Build Build Build’s reliance on foreign contractors and materials has undermined our chance of locally producing these materials and building our own infrastructure using local resources. Even the absorptive capacity, the ability to “learn and use” external knowledge, of the Department of Public Works and Highways (DPWH) and Department of Transportation (DOTr), is limited.

Build Build Build has also failed to deliver the jobs generation that the administration has imagined as one of the benefits. Every year since 2017, the growth in construction employment has been a lot smaller than in 2016. The projected job generation from Build Build Build of 1.2 million annual average in 2017-2022 is a far cry from reality. The annual average job generation from all sectors pre-pandemic or 2017-2019 only reached 313,000,[1] the lowest among all administrations post-Martial Law. We lost 2.6 million jobs last year.

Optimists have looked forward to the public services that may be improved with the finished projects, even if these are not exactly the kinds of infrastructure that are much needed to recover lost jobs and incomes. But that is also one of the follies of debt-driven and privatized infrastructure development – we get to pay for these increasingly irrelevant projects with our taxes and high user-fees. Build Build Build has been backed by the most regressive tax reform the country ever had and the built-in automatic upward adjustments in toll fees, fares and other user-fees.

In all probability, in the future post-pandemic as the economy yields lower returns on investment, the debt owed today will be more expensive than initially computed. This will mean heavier debt burden, more anti-poor and regressive taxes, and higher user-fees for so-called public services. In all certainty by then, we can say that the grand infrastructure age has delivered a legacy of untold poverty and deeper economic crisis. #

[1] Average of 2017-2019 only because of change to 2013 Master Sample Design in 2016

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Kodao publishes IBON articles as part of a content-sharing agreement.

Jobs crisis continues, informal work worsens

by IBON Foundation

Despite economic managers’ claims, the country’s jobs situation is bleak and far from returning to pre-pandemic levels, said research group IBON. Millions of Filipinos are still struggling to find work or turning more and more to informal jobs and self-employment to survive. The group said that substantial ayuda is urgently needed and that Congress should hold a special session to ensure the immediate allocation and distribution of funds for emergency aid.

IBON said the latest labor force figures show that the 3.7 million unemployed in May 2021 remains higher by 1.3 million than in January 2020 before the pandemic. The 2.2 million increase in employment is not enough to accommodate the additional 3.5 million Filipinos in the labor force, still leaving over a million unemployed. The number of underemployed has only decreased by just 807,000.

The employment increase also hides a significant decline in the quality of work and incomes as the country remains battered by the ongoing health and economic crisis, said the group. Millions of Filipinos are increasingly resorting to informal self-employment to make a living any way they can.

IBON noted that, by class of worker, the number of wage and salary workers declined by 131,000 from January 2020 to May 2021. This is mainly due to the 711,000 drop in those that worked for private establishments, likely from closures and retrenchments in micro, small and medium enterprises (MSMEs).

The number of Filipinos entering informal self-employment and unpaid work is also worsening, the group said. Self-employed work without any paid employees climbed to 12.7 million (1.6 million increase) from 11.1 million in January 2020. Unpaid family workers also rose to 3.6 million (932,000 increase). Employers in own family-operated farms and businesses however dropped to 761,000 (241,000 decrease) from about one million – an indication that small businesses and farms have been unable to cope and are shutting down amid the pandemic crisis.

IBON stressed that the number of employed by hours worked also reveals how bad the informal employment situation has gotten. Those that worked part-time went up by 3.2 million to 16.7 million, while those that worked full-time fell by 1.3 million. Those considered as “with a job, not at work” increased by 273,000 to 606,000.  The increase in part-time workers and those with a job but not at work can also be attributed to the rising number of self-employed and businesses implementing reduced workdays and hours.

More and more Filipino workers are entering sectors that are known to be low-paying and irregular, the group noted. Employment in wholesale and retail trade increased by 1.6 million to 10.2 million and in agriculture by one million to 10.6 million. Economic growth in these two sectors however continued to contract in the first quarter of 2021 – agriculture contracted by 1.2% and trade by 3.9%. This strongly implies lower sectoral incomes made worse by overcrowding.

The rise in part-time employment in these sectors also reflects the irregularity of work, said IBON. The number of part-timers grew by 1.1 million to 3.2 million in trade and by 889,000 to 7.2 million in agriculture. 

IBON said that with an increasing number of Filipinos struggling to support themselves amid poor job prospects and falling incomes, substantial aid, subsidies and support are urgently needed. It is time for the government to take immediate steps in providing these and prioritizing the welfare and interests of millions of vulnerable Filipinos. The group said it can start by heeding people’s demand for a special session to ensure the speedy passage of legislation that will ensure the immediate release of funds and distribution of ayuda.

The ill logic of rice liberalization

by Rosario Guzman/IBON Foundation

Runaway inflation has always been our economic managers’ alibi for liberalizing importation. Food always takes a beating from this short-sighted policy, as it has the single biggest weight of 36% in the average commodity basket.

Inflation reached its highest in a decade in 2018 upon the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the most comprehensive and most regressive tax reform the country has ever had. TRAIN slapped value-added taxes and excises on consumer products, including unprecedentedly on all petroleum products. It reduced income taxes, which have benefited only the rich more than the middle class and the poor, as it has ultimately rebalanced income gains with higher prices.

But it was still the rice’s fault, according to our economic managers, and hastily they did push for the tariffication of the quantitative restrictions on the country’s staple. Rice bears a 9.6% weight on inflation and it is an extremely socially sensitive product on the same level as diesel that TRAIN had finally taxed; thus it has to be kept under control. That is their logic for subjecting local rice to undue competition with imported rice that is far better government protected and supported.

Wrong premises

Our economic managers would later point to decreased rice retail prices, although still higher than pre-tariffication levels, to support the argument that imports liberalization indeed benefits the Filipino consumer.   

It’s turning out to be a feeble argument, however, as the country would again see the highest food inflation in 27 months at the beginning of 2021, with meat and vegetables contributing the most. The apparent cause is government’s non-containment of the African swine fever epidemic in the hog subsector. But despite the obvious need for government intervention in domestic production, the official quick reaction is again liberalization, this time of pork imports.

The government has simply been pitting the welfare of local producers against that of the consumers, apparently in a principle of subordinating the interests of the few (the farmers) to the welfare of the many (the consumers). This is also wrongly premised on the Filipino consumers being concerned only with cheap commodities. Joblessness is at its worst level, while economic aid in the face of the pandemic has been meager. Majority of the Filipino consumers need to be productive first and earn decent incomes, or in the immediate be given economic relief, before they could truly benefit from lower prices. But government’s obsession with imports liberalization has only worsened the jobs crisis, loss of livelihoods, and farmers’ bankruptcy.

Denied reality

From 2018 to 2020, palay prices have gone down by an average of 19.5% for both fancy and other varieties. Palay prices are lower by a minimum of Php3.30 per kilo for other varieties, from a national average of Php20.06 to Php16.76 per kilo. Nine of the 17 regions have even lower palay prices than the national average. These are based on official statistics.

Field studies conducted on the first year of the rice tariffication law by Bantay Bigas, a nationwide network of rice advocates, showed farmgate prices going down to as low as Php10-15 per kilo. Palay prices in the range of Php10-14 per kilo were noted in the country’s rice bowls – Nueva Ecija, Tarlac, Bulacan, Pangasinan, Isabela, Ilocos Sur, Mindoro, Bicol, Negros Occidental, Capiz, and Antique. Palay prices in the range of Php11-15 per kilo were seen in Agusan del Sur, Davao de Oro, Davao del Norte, South Cotabato, North Cotabato, Lanao del Norte, and Caraga. Bantay Bigas noted that palay prices continuously declined in four consecutive cropping seasons right after the passage of the rice tariffication law.

Value of palay production went down from Php385 billion in 2018 to Php318.8 billion in 2020 despite a slight increase of 229,000 metric tons (MT) in production volume at 19.3 million MT in 2020. If the average farmgate price of Php20.06 before rice tariffication was maintained, production value would be more or less at the level of Php387 billion – thus a visible loss of Php68.3 billion in the last two years, or Php32,523 for each rice farmer.

These are based on official figures. Bantay Bigas noted that farmers in Zaragoza, Nueva Ecija lost Php20,000 to Php35,000 per hectare in 2019, as farmgate prices dropped to Php14 per kilo during the dry season and Php10-13 per kilo during the wet season. Farmers in Barangay Carmen in the same municipality have mortgaged about 40% of their rice lands or an estimated 80 hectares due to depressed farmgate prices. In Gabaldon, Nueva Ecija, some rice lands near the highways were already sold at Php1 million per hectare.

In 2019, rice farmers’ net income per hectare decreased by 32% in the dry season, by 47% in the wet season, and by 38% on the average as compared to figures in 2018, according to the Philippine Statistics Authority. This translated to substantially lower profitability ratio for the farmers. For every peso the rice farmer spent on one hectare, his profit declined in 2019 from 73 centavos to 53 centavos in the dry season, from 63 to 36 in the wet season, and on the average from 73 centavos to 47 centavos.

The average net income of Php21,324 in 2019 translated to Php236.93 per day in a 90-day cropping season, down from 2018’s Php34,111 or Php379.01 a day. The farmer lost Php142.08 income per day, which was way bigger than the Php4.65 per day that his family supposedly gained from cheaper rice. (Regular milled rice was reportedly cheaper by Php2.86 per kilo in 2019. The daily average per capita rice consumption is 325.5 grams or 0.3255 kilogram. Thus, 0.3255 kilogram x 5 family members x Php2.86 = Php4.65)

These are official figures. We are not even talking about rice farmers who incurred net losses.

Also incidentally, the Php236.93 income per day recorded in 2019 was short of the already incredibly low official poverty threshold of Php354 per day for a family of five. It was not even enough for the official family food threshold of Php248. The reality is undeniable: the country’s rice producers live in acute poverty and hunger, and rice liberalization is directly responsible for this irony.

The bigger picture

The rice tariffication law purports to offset these losses by allocating the tariff revenues to support farmers. We do not need to go into detail about how these are not enough or at worst tokenistic. We only need to see the trend of government’s agricultural support to conclude that the Duterte administration has put the sector aside in favor of other hollow and counter-productive budget items, including its infrastructure agenda.

The budget for agriculture in 2021 is only Php110.16 billion, merely 2.2% of the national budget. This has diminished further from the 2019 share of 2.7%, which is apparently already the largest under the Duterte administration. Including the budget for agrarian reform, the annual average allocation in 2017-2020 is only 3.6% of the national budget, the lowest in 21 years. This still got smaller at 3.2% in 2021.

The country’s rice self-sufficiency ratio has significantly gone down from 93.4% in 2017 to only 79.8% by 2019. Such increased import dependence is not even justified anymore by the goal of curbing inflation nor by inadequate supply. It is but a formed habit from chronically neglecting domestic production. To illustrate, despite the hyped increase in production volume in 2020 and even at harvest time, the Duterte government approved the importation of 300,000 MT. The pandemic has apparently prompted exporters such as Vietnam and Thailand to prioritize their domestic consumption, triggering already ingrained insecurity among importers such as the Philippines.

Also totally negating the inflation argument now is the fact that Vietnam and China have already started buying rice from India due to increased local prices. This could precipitate another fast rice inflation in the narrow global market, on which the Philippines has unduly relied at the expense of its own direct producers.

This brings us back to the bigger picture – that the farmers’ struggle for the reversal of rice liberalization and for more responsible state intervention is not just about themselves but the more meaningful future of food security and national development. #

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(A contribution to the virtual forum “Rice Tariffication Law: Two Years After” sponsored by the College of Economic Management, University of the Philippines Los Baños, 22 June 2021)

There’s money for bigger Bayanihan 3: Economic managers just refusing to give more — IBON

by IBON Foundation

There is more than enough money for bigger emergency aid and stimulus in Bayanihan 3 if only the economic managers prioritize ayuda, research group IBON said.

There are various sources that the government can immediately tap for a more meaningful Bayanihan 3, said the group.

These include at least Php217 billion in unobligated and unpaid obligated funds from Bayanihan 1 and 2, and realigning 2021 budget allocations from less urgent items.

The Php401 billion Bayanihan 3 stimulus bill sponsored by over 290 lawmakers has been passed on second reading at the House of Representatives.

Though a larger program than Bayanihan 2, the provisions for emergency aid remain paltry, said IBON.

The group said, for instance, that the Php1,000 emergency assistance given twice to each Filipino will mean that the average family in the badly-hit National Capital Region (NCR) will just get the equivalent of around half of the monthly minimum wage.

The NCR minimum wage is currently Php537 for an equivalent monthly rate of Php16,300.

The economic managers however have been blocking efforts to increase the aid that will be given to millions of distressed families and enterprises.

The government has not even certified Bayanihan 3 as urgent. The budget, finance and treasury departments have also yet to issue a certification on the availability of funds, a constitutional requirement for the passage of bills seeking funds appropriation.

IBON said that the problem is not where to get funding but rather the Duterte administration’s unwillingness to prioritize poor and pandemic-stricken Filipinos.

The group said that there are potentially hundreds of billions of pesos available in funding if only the government pushes the priority legislation needed.

Budget department data as of April 15 shows that there are still Php217 billion in funds from Bayanihan 1 and 2.

This includes a considerable Php158.4 billion that remains unobligated out of the Php653.4 billion in allotments.

Moreover, there is Php58.9 billion in unpaid obligated funds.

These are funds allocated for COVID response that have not yet been committed to a specific item or program (unobligated) or have been committed but not yet disbursed (unpaid obligated).

IBON also notes that there are Php5.9 trillion in revenues (Php2.9 trillion) and borrowings (Php3 trillion) estimated for 2021.

IBON stressed that the administration can realign budgetary allocations from items that are now less urgent, given critical pandemic-related needs, and even counter-productive.

The government can realign from the huge Php1.8 trillion allotted for debt service (Php1.3 trillion for principal payments and Php531.6 billion for interest payments), Php1.1 trillion for infrastructure, Php9.5 billion for confidential and intelligence funds, and Php19.1 billion for the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC).

The group emphasized that the enormous health and economic crisis requires a proportionately enormous response.

This is particularly because the Duterte government’s ill-conceived protracted lockdowns are the biggest reason for the collapse in livelihoods and incomes of tens of millions of Filipinos.  

Bayanihan 3 can be a start to the  expansionary fiscal policy that IBON has proposed to jumpstart the economy.

The Duterte administration can readily find the funds for meaningful aid and stimulus if it wanted to, IBON said. After 420 days of the government’s poor and stingy response, Filipinos more than ever need a government with the political will and boldness to put the people’s needs first over the profits of a wealthy few. #

Gov’t hyping employment gains to avoid giving more ayuda, stimulus – IBON

The economic managers are overstating employment gains to cover up the harsh impact of their refusal to give more cash aid and meaningfully stimulate the economy, said research group IBON.

Latest labor force figures show that Filipinos are not regaining their jobs and incomes and, on the contrary, are desperately trying to make a living in whatever way they can.

“The seeming improvement in the jobs situation from the reported higher employment and lower unemployment is an illusion, said Sonny Africa, IBON Executive Director. “Many Filipinos have still not regained their full-time work and small businesses. They’re just trying to get by on informal and irregular work with likely low and uncertain incomes.”

Comparing March 2021 labor force data to January 2020 data before the pandemic and the start of endless lockdowns, IBON noted that while the number of employed increased by 2.8 million, the labor force also grew by 3.8 million. 

This means there was not enough work for those entering or returning to the work force, resulting in a one million increase in unemployment, said the group.

IBON also observed that these additional jobs are made up of mostly irregular and informal work.

Africa said that the clearest sign of this is the decline in full-time work (40 hours and over) by 550,000 to 28.2 million in March 2021 from 28.8 million in January 2020. The increase in the number of jobs was overwhelmingly of part-time work (less than 40 hours) which grew by a huge 3.2 million and of those ‘with a job, not at work’ which grew by 128,000.

Over half of part-time workers surveyed said they are working less than 40 hours due to variable working time or nature of work. This could be due to reduced work hours brought about by pandemic conditions and lockdowns.

The significant rise in self-employment is another indication that there is a lack of decent work. Africa said that the supposed employment gains are largely in ‘self-employed without any paid employee’ which grew by 1.7 million (to 12.8 million) and of ‘unpaid family workers’ which rose by a huge one million (to 3.6 million) in March 2021.

Meanwhile, the 28.1 million wage and salary workers in March 2021 is only 333,000 more than the 27.8 million in January 2020.

These are aside from some 206,000 employed in small family businesses which have shut down between January 2020 and March 2021, as indicated by the fall in ’employers in own family-operated farms or business’.

Africa said that this may be due to how micro, small and medium enterprises (MSMEs) are getting scant support from the government, especially informal and unregistered MSMEs.

Africa also said that household incomes have fallen so low after over a year of lockdowns that more youth and otherwise retired elderly are seeking work to supplement household incomes.

The labor force participation rate of age groups 15-24 years old and 65 years old and above increased by 2.3 percentage points and 2.7 percentage points from February 2021 to March 2021, respectively.

According to the Philippine Statistics Authority, these two age groups largely contributed to the increase in the labor force during this period.

Recovery is stifled by the economic managers refusing to give more ayuda, improve the welfare and increase the purchasing power of households, and stimulate small businesses and the national economy, said Africa.

The real value of the minimum wage measured at 2012 constant prices also continues to fall –  from Php468.06 in June 2016 at the start of Pres. Duterte’s term to just Php434.47 in April 2021 –  and is as low as almost a decade ago (Php434.38 in December 2011).  

Three out of four Filipino households do not even have any savings to fall back on, he said.

Africa said that the persisting economic crisis will become even clearer when the first quarter gross domestic product (GDP) figures come out next week.

He said, “We will likely see tepid economic growth at most despite the so-called improved employment situation. This will just underscore how poor the quality of jobs remains and how shallow the economic rebound is.”

IBON said that the government can arrest the problem by giving much more emergency cash assistance. This will not just improve household welfare but also boost aggregate demand and spur more rapid economic recovery.

The multiplier effects from this will be much greater and more immediate than the same amount going to grandiose import-intensive infrastructure projects, debt servicing, and human rights-violating counterinsurgency, said the group. #

Ayuda urgent: Jobs crisis still worse than before pandemic — IBON

Government claims of the employment situation improving in February 2021 compared to pre-pandemic January 2020 are unfounded, research group IBON said.

The so-called increase in employment is just Filipinos desperate to make a living in any way they can. This makes the need for substantial cash aid even more urgent, the group said.

The economic managers repeatedly claim that “we have surpassed our pre-pandemic employment level of 42.6 million in January 2020,” such as when the February 2021 labor force survey (LFS) results were released.

IBON said the LFS figures, however, clearly show that the jobs crisis existing even before the pandemic has only gotten worse upon the longest and harshest lockdowns in Southeast Asia.

Reported employment increased by 610,000, from 42.5 million in January 2020 to 43.2 million in February 2021. But this was far from enough for the labor force which grew by 2.4 million over that same period to 47.3 million, said the group, resulting in even greater unemployment.

IBON also noted that there are 12 million combined unemployed (4.2 million) and underemployed (7.9 million) Filipinos as of February 2021, which is much more than the 8.7 million in January 2020 (i.e. 2.4 million unemployed and 6.3 million underemployed).

The 1.8 million increase in unemployment in itself already indicates collapsing household incomes for millions of Filipino families, said the group.

Photo by R. Villanueva/Kodao

The marginal increase in employment should not be seen as a sign of any improvement because it masks a serious deterioration in the quality of work in the country, IBON said. Even less than before, so-called employment is not enough to give Filipino families the regular and secure incomes they need to survive.

By class of workers, the number of wage and salary workers fell by over 1 million and of employers in family farms and businesses by 72,000 from widespread lockdown-driven business closures and retrenchments. These are down to 26.7 million and 930,000, respectively.

IBON noted that jobless Filipinos were apparently driven to “self-employment” which bloated by 1.4 million and to being “unpaid family workers” which rose by 356,000. These increased to 12.5 million and 3 million, respectively.

By hours worked, the number of full-time workers fell by 2.9 million to 25.9 million. Those working only part-time however increased by 3.2 million to 16.6 million, and those “with a job, not at work” by 325,000 to 657,000.

IBON stressed that tens of millions of Filipinos are going hungry, most of all from not having the money to buy food especially from the lack of work.

The Php10,000 emergency cash assistance being demanded is all the more urgent to immediately alleviate hunger. The inflation-adjusted official food threshold as of March 2021 for a family of five is Php2,133 per week in the National Capital Region (NCR) and Php1,905 per week on average for the Philippines.

The latest Php1,000 token cash aid is glaringly not even enough for food expenses, considering even that official food thresholds are ridiculously low to begin with, IBON said.

At the same time, a large fiscal stimulus is critical to arrest economic scarring, jump-start the economy, and genuinely improve employment on a wider scale, said the group. #